GAJANAN Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) Petitioner, a bank in the private sector filed its return of income for Assessment Year 1997-98 on 1/12/1997. In the computation, petitioner returned income of Rs.12,73,80,111.00 being interest accrued as due on Government securities and debentures held by petitioner as on 31 st March 1997.

(2.) By an order dtd. 28/3/2000 2ndRespondent (ACIT) completed the Assessment for Assessment Year 1997-98. In the Assessment Order among other adjustments, the 2ndRespondent held that a sum of Rs.25,17,19,849.00 being interest on Government securities held by petitioner had accrued to petitioner as on 31/3/1997 and as such was liable to tax under Sec. 5 of the Act. The 2ndRespondent further held that a sum of Rs.12,73,80,111.00 being interest received by petitioner in the Financial Year 1996-97 (Assessment Year 1997-98) and offered as income was in fact income of the preceding year, i.e., Assessment Year 1996-97 and was wrongly offered to tax in Assessment Year 1997-98. Accordingly 2nd Respondent brought to tax in Assessment Year 1997-98 a sum of Rs.12,43,39,738.00 (incorrectly mentioned as Rs.12,46,39,738.00) being the difference between Rs.25,17,79,849.00 accruing in Assessment Year 1997-98 and Rs.12,73,80,111.00 offered by petitioner as income for Assessment Year 1997-98.

(3.) On 24/3/2000 petitioner filed an application under Sec. 245 C (Application for settlement of cases) of the Income Tax Act, 1961 (the Act) before the Settlement Commission in respect of Assessment Year 1997-98. The application was filed only for surrendering its claim for depreciation on certain leased assets.